The Whiter, Politer Racism
Thaddeus Howze
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VCs may be anti-American but they’re not racist.

Why are there so few African American startup founders? If you are to believe Thaddeus Howze it is due to racial discrimination. Thaddeus is right about one thing, venture capital’s business IS discrimination. Only 2.5% of the startups and founders seeking capital will ever raise a dime from venture capital firms. This is the one constant percentage in the system and it has nothing to do with race. As David Rose explains, “there are no really great people with really great ideas who go unfunded.”

To put things in perspective, African American’s represent just 13% of the population. Of these, 1.2 million are STEM workers. Approximately 12,000 will seek venture capital funding in any given year and of those, only 30 will get funded. Compare that to their non-African American counterparts who seek venture capital. Out of a pool of 8.7 million, only 2,400 will receive venture capital. Of course, there are real winners and losers in this system. Here's an approximate breakdown:

  • 60,000 startups seek capital each year
  • 120,000 founders seek capital each year
  • 1,500 startups are funded each year
  • 3,000 founders are funded each year
  • 975 of the founders are immigrants
  • 30 of the founders are African Americans

Venture capitalists are perhaps one of the most discriminatory groups in America, but American citizens are far more discriminated against than African Americans. The ONLY way we can fix it is for Americans (of any race) to come up with better startup ideas.

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